BOSTON - After some tense negotiations, state legislators on Monday voted initial approval of the governor's financial relief bill for Springfield, including a new compromise measure to possibly overhaul the process for awarding city towing contracts.

The bill is now set for final approval today in each of the Senate and the state House of Representatives. After approval in each branch, the bill will go to the desk of Gov. Deval L. Patrick, who is expected to sign it into law.

Patrick has said he needs approval of the bill to set the stage for abolishing by June 30 the Springfield Finance Control Board, a state panel that oversees city government.

Patrick has said he wants to allow the city to govern itself without the control board, which was established in 2004 when the city was basically bankrupt.

Patrick's bill, filed in June, is designed to help continue the city's financial turnaround.

Under the bill, Springfield would save an average $7 million a year when it pays back a $52 million, no-interest state loan. The bill spreads out the loan payments, giving the city 15 years to retire the loan, three times longer than the current requirement.

The bill also creates a chief administrative and financial officer in Springfield to coordinate and supervise all city spending.

The bill places a referendum on the city ballot this year that, if approved, would double the length of a mayor's term to four years, starting with the 2011 regular city election.

Legislators negotiated all day to assure approval of the bill.

The Senate approved the legislation in the morning and sent the bill to the state House of Representatives. Late in the afternoon, House members voted to amend the bill at the insistence of Rep. Benjamin Swan, D-Springfield.

After approving Swan's amendment, the House sent the legislation back to the Senate. The Senate on Monday night voted to adopt Swan's changes.

Under Swan's amendment, the Financial Control Board would review the state Inspector General's report on a contract for police-ordered towing of vehicles. The board would make recommendations to the Patrick administration on whether to put the inspector general's suggestions into effect.

Swan opposed Mayor Domenic J. Sarno's decision last year to terminate the contract of the Springfield Towing Alliance, a minority contractor.

"I thought it was important," Swan said after his amendment was approved. "It addresses an important issue in the city of Springfield."

Reps. Angelo J. Puppolo Jr., D-Springfield, and Curran said they opposed Swan's amendment, but agreed to move the bill ahead for the good of the city.

Swan could have blocked the bill if legislators rejected his amendment.

"There's really no options," Puppolo said. "We're caught between a rock and a hard place."

The Senate also voted to approve another House amendment to abolish the city's annual $90 trash fee in 2011.

Sen. Gale D. Candaras, D-Wilbraham, said the awarding of towing contracts is not the business of state legislators, but she didn't want the bill to fail.

The Senate on Monday also agreed to two amendments approved in the House last week, including one that would repeal the city's disputed trash removal fee on July 31, 2011.

The Senate also agreed to a second amendment that requires all new or promoted nonunion city employees to become residents of Springfield within six months of an appointment.

"Those two amendments will help stabilize the city of Springfield," said Rep. Cheryl A. Coakley-Rivera, D-Springfield, who sponsored the changes.

Buoniconti said senators compromised with Coakley-Rivera, who threatened to stop the legislation unless the trash fee was abolished. As part of the deal, she dropped a proposed amendment to extend by two years the life of the control board.

In addition, the bill gives the chief administrative officer the authority to review school spending, but it also contains strong language to protect the current powers and duties of the School Committee.

The bill does consolidate the operations of the business and financial services department of the school department with those of the city under the chief administrative officer.

The bill also restricts the power of a new comptroller to transfer money from the school department, saying such a transfer could only take place if spending on schools is at or above a certain amount required under state education law.